Tax cut coming in July for city homeowners

The homes and commercial properties with the biggest property-tax bills in Baltimore are largely within walking distance of each other, with most clustered downtown and around the Inner Harbor. The Baltimore Sun analyzed city records to rank the properties with the most taxes — after accounting for any breaks — for the tax year that ends June 30. By way of comparison: The taxes on a city home that's assessed at $100,000 come to $2,268. Read more of The Sun's analysis here.

Luke Broadwater, The Baltimore Sun

Starting in July, Baltimore homeowners can expect to see their tax bills get a little lighter.

That's when Mayor Stephanie Rawlings-Blake's property tax reduction plan goes into effect, resulting in a 2-cent cut per $100 of assessed value next fiscal year. Under the measure, approved Monday by the City Council, taxes on an owner-occupied home valued at $200,000 will drop by $40 next year.

The reduction is scheduled to grow to $400 by 2020, though the continued cuts are contingent on approval each year by the city's Board of Estimates.

"We know that attracting new families to Baltimore is critical," said Council President Bernard C. "Jack" Young. "We can't accomplish this goal until we begin to address the elephant in the room: our prohibitively high property tax rate. The mayor's plan ... is a good start."

Not everyone favors the proposal, which would reduce the property tax rate for people who own and live in their homes by 20 cents per $100 of assessed value by 2020.

Clarke said she opposed the measure — which would cost the city $3.8 million next year — because the council should have the opportunity to consider using the money for services, such as fire companies and recreation centers that are being closed.

"That's two fire companies," she said. "It's an awful lot of money for fire companies or after-school programs. It's not a lot for property owners."

The city's current property tax rate of $2.268 per $100 is more than double that of the surrounding counties. The rates for Baltimore, Harford, Howard and Carroll counties hover around $1 per $100 of assessed value.

Rawlings-Blake's plan calls for a 9 percent tax cut over nine years. By 2020, the tax rate is scheduled to drop to $2.068 per $100 of assessed value.

The mayor has said she expects to make up the lost revenue through the proceeds of a casino proposed for the city. The future of the casino proposal is uncertain. Caesars Entertainment is the leading bidder for the slots parlor but has not been awarded the license. Caesars is the only viable applicant, officials have said.

Under the mayor's legislation, 90 percent of the city's revenue from the slots casino would go toward reducing property taxes and 10 percent would help pay for a school construction initiative. Rawlings-Blake announced her property tax plan during last summer's mayoral race as several of her challengers proposed alternative plans and criticized the mayor's proposal as doing too little.

Christopher B. Summers, president of the nonpartisan Maryland Public Policy Institute, criticized the tax cut as too small and funded through uncertain revenue streams.

"This has to be one of the weakest attempts at cutting property taxes in the Northern Hemisphere," Summers said. "This is her attempt at providing the least amount of tax relief possible, and it assumes revenue from a dubious funding source. It gives her a very easy way out. I'm willing to bet that slots revenue won't materialize and this plan won't go through."

Rawlings-Blake says calls for deeper cuts more quickly are irresponsible and would cripple city services, including police operations and school funding.

She said by gradually reducing the property tax rate and partly relying on new revenue from slots, the city will still have to make "difficult budget choices" but will be able to reward people who choose to move here and buy property.

"Under this bill, vacant homes do not qualify for a tax cut; vacant lots don't qualify; and speculators and owners of blighted properties won't get a penny of tax relief at the expense of everyone else. This tax cut is for city homeowners first," she said.